Sept. 6, 2018 ( Courtesy of CBC.ca ) – St. Francis Xavier University in Antigonish, N.S., is suing the former finance director of the school’s Coady International Institute, accusing him of misappropriating at least $243,000.
The statement of claim filed in Nova Scotia Supreme Court alleges James Edward Marlow created fake invoices from suppliers, requisitioned cheques from the university for those invoices, then deposited the cheques into his personal account.
Marlow’s actions constitute misappropriation of funds, theft and fraud, the university alleges in its claim, which was filed with the court in Pictou, N.S., on Aug. 28.
The Coady Institute is a signature part of St. FX and is well known for training professionals from around the world in the field of international development.
While there is a “significant ongoing investigation” to determine the extent of the alleged misappropriation, the university is claiming damages of at least $243,000.
The RCMP and St. FX confirmed last month that police have launched a fraud investigation.
Auditor flagged problem
The university began investigating in July, when the school’s auditor informed staff a vendor had received payment for an invoice it hadn’t issued.
The school’s vice-president of finance and administration, Andrew Beckett, stated in his affidavit that the fake invoices said “hold for pickup” so the cheques wouldn’t be mailed to the vendors. Then, Marlow would either pick them up or have a staff member deliver them to him.
The cheque that drew the attention of the auditor had been inadvertently mailed to the vendor, despite the instruction to “hold for pickup.”
According to Beckett’s affidavit, he interviewed Marlow on July 17 and told him of the results of his preliminary investigation.
“Mr. Marlow’s response was to the effect of ‘you know everything now,'” reads the affidavit, adding that Marlow did not deny that he created phoney invoices or deposited the cheques into his account.
Suspicious invoices totalled $264k
The university called in the accounting firm Deloitte to investigate on July 19, the same day Marlow was fired.
A manager from Deloitte notes in her affidavit it found 32 suspicious invoices totalling $264,098 purporting to be from three vendors. While the invoices had the template, numbering and logo of the vendors, they didn’t look exactly like those on legitimate invoices issued by those companies.
The university has obtained an attachment order — a way of preserving Marlow’s assets in case a judgment is awarded to the university in the future — for $229,023 against his property in Lower South River, near Antigonish.
The university is also asking for punitive and aggravated damages, interest on the amounts of allegedly misappropriated funds and legal costs.
None of the allegations have been tested in court. Marlow has not yet filed a defence.
Marina Burghard writes for Canadian Fraud News about fraud-related cases, whistleblower, jurisdiction, identity theft, consumer protection, etc. – essentially about scams and how to protect yourself against this kind of fraudulent criminal behavior. She holds a Master’s degree in Political Science where her interest in criminology grew. Besides fraud, Marina’s scientific interest lies in terrorism, extremism and how to deal with it as a society.